Financial results for the first quarter of 2017 compared to the first
quarter of 2016:ii

Revenue increased 24% to $114.1 million for the first quarter of 2017
from $92.1 million for the first quarter of 2016.

Professional management revenue increased 29% to $106.8 million for
the first quarter of 2017 from $82.8 million for the first quarter of
2016.

Net income increased 266% to $12.2 million for the first quarter of
2017 from $3.3 million for the first quarter of 2016.

Diluted earnings per share increased 217% to $0.19 per share for the
first quarter of 2017 from $0.06 per share for the first quarter of
2016.

Non-GAAP adjusted EBITDAii increased 24% to $35.2 million
for the first quarter of 2017 from $28.3 million for the first quarter
of 2016.

Non-GAAP adjusted net incomeii increased 47% to $21.1
million for the first quarter of 2017 from $14.4 million for the first
quarter of 2016.

Non-GAAP adjusted earnings per shareii increased 38% to
$0.33 for the first quarter of 2017 from $0.24 for the first quarter
of 2016.

Key operating metrics as of March 31, 2017:iii

Assets under contract (“AUC”) were $1.11 trillion.

Assets under management (“AUM”) were $144.4 billion.

Professional management clients were over 1,012,000.

The asset enrollment rate across all employer plans was 12.1%iv.

“In the past quarter, we continued to see good momentum in our
business,” said Larry Raffone, president and chief executive officer of
Financial Engines. “With encouraging leading indicators, including the
performance of the refreshed campaigns and our ongoing enrollment
efforts, improvements in client retention, and the positive reaction to
our expanded offering, we believe we have exciting opportunities that
can drive our long-term growth in 2018 and beyond.”

Review of Financial Results for the First Quarter of 2017

Revenue increased 24% to $114.1 million for the first quarter of 2017
from $92.1 million for the first quarter of 2016, driven primarily by
the growth in professional management revenue which increased 29% to
$106.8 million for the first quarter of 2017 from $82.8 million for the
first quarter of 2016. The first quarter of 2017 revenue also included
one additional month of revenue related to the 2016 acquisitions.

Costs and expenses increased 15% to $97.8 million for the first quarter
of 2017, which included one additional month of operating expenses
related to the 2016 acquisitions, from $84.7 million for the first
quarter of 2016. This was due primarily to increases in employee-related
costs, including wages, driven by headcount growth and higher
compensation, non-cash stock-based compensation, and fees paid to plan
providers for data connectivity to plan and plan participant data. These
increases were partially offset by a decrease in consulting fees as
significant acquisition-related consulting expenses were incurred in the
first quarter of 2016. As a percentage of revenue, cost of revenue was
45% for the first quarter of 2017 compared to 43% for the first quarter
of 2016.

Income from operations was $16.3 million for the first quarter of 2017
compared to income from operations of $7.4 million for the first quarter
of 2016. As a percentage of revenue, income from operations was 14% for
the first quarter of 2017 compared to 8% for the first quarter of 2016.

Our effective tax rate for the first quarter of 2017 was 25%, which
included tax benefits associated with the adoption of ASU 2016-09,
compared to an effective tax rate of 55% in the first quarter of 2016,
which included non-deductible expenses related to the acquisition. Net
income was $12.2 million, or $0.19 per diluted share, for the first
quarter of 2017 compared to net income of $3.3 million, or $0.06 per
diluted share, for the first quarter of 2016. On a non-GAAP basis,
adjusted net incomeii was $21.1 million and adjusted earnings
per shareii were $0.33 for the first quarter of 2017 compared
to adjusted net income of $14.4 million and adjusted earnings per share
of $0.24 for the first quarter of 2016.

“Over the last two years, assets in defined contribution managed
accounts grew by over 25%, with Financial Engines accounting for more
than half of that asset growth,” says Ray Sims, chief financial officer
of Financial Engines. “Plans which have hired us represent 9.6 million
participants and over $1.11 trillion in retirement assets, and we
believe that the value of our services will continue to attract new plan
sponsors, clients and assets under management.”

Assets Under Contract and Assets Under Management

Workplace AUC increased by 13% year-over-year to $1.11 trillion as of
March 31, 2017 from $975 billion as of March 31, 2016, due primarily to
market performance, contributions, and new employers making our services
available, partially offset by cancellations and withdrawals.

AUM increased by 18% year-over-year to $144.4 billion as of March 31,
2017, from $122.0 billion as of March 31, 2016. The increase in AUM was
driven primarily by new assets from new and existing clients and market
performance, partially offset by cancellations and withdrawals.

Q2'16

Q3'16

Q4'16

Q1'17

(In billions)

AUM, beginning of period

$

122.0

$

125.3

$

134.4

$

138.0

New assets - new clients(1)

4.6

4.4

5.9

3.4

New assets - existing clients(2)

2.0

2.2

2.1

2.4

Asset cancellations -voluntary(3)

(1.8

)

(1.9

)

(2.3

)

(2.1

)

Asset cancellations - involuntary(4)

(1.4

)

(1.8

)

(2.1

)

(2.7

)

Assets withdrawn - existing clients(5)

(0.1

)

(0.1

)

(0.2

)

(0.2

)

Net new assets

3.3

2.8

3.4

0.8

Market movement and other(6)

—

6.3

0.2

5.6

AUM, end of period

$

125.3

$

134.4

$

138.0

$

144.4

(1)

New assets from new clients represents the aggregate amount of new
AUM, measured at or near the end of the quarter, from new clients
who enrolled in our professional management service.

(2)

New assets from existing clients represents the aggregate amount
of new AUM within the quarter from existing clients who originally
enrolled in our professional management service during a prior
period, including employee and employer contributions of $2.1
billion for the current period. Employer and employee
contributions are estimated each quarter from annual contribution
rates based on data received from plan providers or plan sponsors.

(3)

Voluntary cancellations represent the aggregate amount of assets,
measured at or near the start of the quarter, for clients who have
voluntarily terminated their professional management service
relationship within the period.

(4)

Involuntary cancellations represent the aggregate amount of
defined contribution assets, measured at or near the start of the
quarter, for clients whose professional management service
relationship was terminated within the quarter period for reasons
other than a voluntary termination.

(5)

Assets withdrawn represents the amount of voluntary withdrawals
from IRA and taxable accounts by existing clients.

(6)

Market movement and other represents factors affecting AUM
including estimated market movement, plan administrative and
investment advisory fees, client loans, hardship and other defined
contribution account withdrawals, and timing differences for the
data feeds for clients enrolled in our professional management
service throughout the period.

For further information on the AUM data above, please refer to our Form
10-Q to be filed for the period ended March 31, 2017.

Aggregate Investment Style Exposure for Portfolios Under Management

As of March 31, 2017, the approximate aggregate investment style
exposure of the portfolios we managed was as follows:

Domestic equity

46

%

International equity

27

%

Bonds

24

%

Cash and uncategorized assets(1)

3

%

Total

100

%

(1)

Uncategorized assets may include CDs, options, warrants and other
vehicles not currently categorized.

Quarterly Dividend

On April 25, 2017, Financial Engines’ Board of Directors declared a
regular quarterly cash dividend of $0.07 per share of the Company’s
common stock. The cash dividend will be paid on July 6, 2017 to
stockholders of record as of the close of business on June 14, 2017.

Outlook

Financial Engines’ growth strategy includes focusing on increasing
penetration within existing professional management plan sponsors,
enhancing and extending services to individuals entering and in
retirement, and expanding the number of plan sponsors.

Based on the closing level of financial markets on April 28, 2017 and
under typical market conditions, the Company estimates that 2017 revenue
will be in the range of $480 million to $487 million, 2017 GAAP net
income will be in the range of $56 million to $58 million and 2017
non-GAAP adjusted EBITDA will be in the range of $158 million to $162
million. A reconciliation of our non-GAAP adjusted EBITDA outlook to our
GAAP net income outlook is contained in the accompanying financial
tables.

Please refer to the tables included in this release that reconcile our
GAAP net income to non-GAAP adjusted EBITDA, non-GAAP adjusted net
income and non-GAAP adjusted earnings per share.

Conference Call

The Company will host a conference call to discuss its first quarter
2017 financial results as well as its 2017 outlook on Thursday, May 4,
2017 at 5:00 p.m. ET. The live webcast and presentation can be accessed
from the Company's investor relations website at www.financialengines.com.
The conference call can also be accessed live over the phone by dialing
(888) 348-6435, or (412) 902-4238 for international callers. A replay
will be available beginning approximately one hour after the call and
can be accessed from the Company’s investor relations website, or by
dialing (844) 512-2921, or (412) 317-6671 for international callers; the
conference ID is 10103622. The conference call replay will be available
until May 11, 2017.

About Non-GAAP Financial Measures

This press release and its attachments include certain non-GAAP
supplemental performance measures. The presentation of this financial
information is not intended to be considered in isolation or as a
substitute for the financial information prepared and presented in
accordance with U.S. generally accepted accounting principles (GAAP).
These non-GAAP measures include non-GAAP adjusted EBITDA, non-GAAP
adjusted net income, and non-GAAP adjusted earnings per share. Adjusted
EBITDA represents net income before net interest expense (income),
income tax expense (benefit), depreciation, amortization of intangible
assets, including internal use software, amortization and impairment of
direct response advertising, amortization of deferred sales commissions,
non-cash stock-based compensation expense and expenses related to the
closing and integration of acquisitions, if applicable for the period.
Adjusted net income represents net income before non-cash stock-based
compensation expense, amortization of intangible assets related to
assets acquired, including customer relationships, trade names and
trademarks, expenses related to the closing and integration of
acquisitions and certain other items such as the income tax benefit from
the release of valuation allowances, if applicable for the period,
partially offset by the related tax impact of these items. Adjusted
earnings per share is defined as adjusted net income divided by the
weighted average of dilutive common share equivalents outstanding.
Further information regarding the non-GAAP performance measures included
in this press release, including a reconciliation of non-GAAP financial
measures to the most directly comparable GAAP measures, is contained in
the financial tables and will be contained in the Company’s Form 10-Q to
be filed for the quarter ended March 31, 2017.

To supplement the Company’s consolidated financial statements presented
on a GAAP basis, management believes that these non-GAAP measures
provide our Board of Directors, management and investors with additional
information and greater transparency with respect to our performance and
decision-making. We feel these performance measures provide investors
and others with a better understanding and ability to evaluate our
operating results and future prospects, and provides the same
performance measurement information as utilized by management. These
adjustments to the Company’s GAAP results are made with the intent of
providing both management and investors a more complete understanding of
the Company’s underlying operational results, trends and performance.

Our management uses non-GAAP adjusted EBITDA, adjusted net income and
adjusted earnings per share as measures of operating performance, for
planning purposes, including the preparation of annual budgets, to
allocate resources to enhance the financial performance of our business,
to evaluate the effectiveness of our business strategies and in
communications with our Board of Directors concerning our financial
performance. In addition, management currently uses non-GAAP measures in
determining cash incentive compensation.

About Financial Engines

Financial Engines is America’s largest independent investment advisor1.
We help people achieve greater financial clarity by providing
comprehensive financial planning and professional investment management
and advice. Headquartered in Sunnyvale, CA, Financial Engines was
co-founded in 1996 by Nobel Prize-winning economist William F. Sharpe.
We currently offer financial help to more than 9 million people across
over 700 companies (including 146 of the Fortune 500). Our unique
approach, combined with powerful online services, dedicated advisors and
personal attention, promotes greater financial wellness and helps more
Americans to meet their financial goals.

This press release and its attachments contain forward-looking
statements that involve risks and uncertainties. These forward-looking
statements may be identified by terms such as “plan to,” “designed to,”
“will,” “can,” “expect,” “estimates,” “believes,” “intends,” “may,”
“continues,” “to be” or the negative of these terms, and similar
expressions intended to identify forward-looking statements. These
forward-looking statements include, but are not limited to, statements
regarding: our belief regarding the momentum in our business, that we
have opportunities that can drive our long-term growth, and that the
value of our services will continue to attract new plan sponsors,
clients and assets under management; Financial Engines’ expected
financial performance and outlook, including reconciliation information
related thereto and factors which may impact our outlook; and the
benefits and anticipated uses of our non-GAAP financial measures. These
statements involve known and unknown risks, uncertainties and other
factors which may cause actual results, performance or achievements to
differ materially from those expressed or implied by such
forward-looking statements, and reported results should not be
considered as an indication of future performance. These risks and
uncertainties include, but are not limited to risks related to the
acquisition of The Mutual Fund Store, including our ability to fully
realize the anticipated benefits of the transaction, the effect of the
integration of the acquisition of The Mutual Fund Store on our business,
financial condition and operating results, including our revenue and
expenses; our reliance on fees earned on the value of assets we manage
for a substantial portion of our revenue, the impact of the financial
markets on our revenue and earnings, unanticipated delays in rollouts of
our services, our ability to increase enrollment, our ability to
correctly identify and invest appropriately in growth opportunities, our
ability to introduce new services and accurately estimate the impact of
any future services on our business, the risk that the anticipated
benefits of our investments in these services or in growth opportunities
may not outweigh the resources and costs associated with these
investments or the liabilities associated with the operation of these
services, our relationships with plan providers and plan sponsors, the
fees we can charge for our professional management service, our reliance
on accurate and timely data from plan providers and plan sponsors,
system failures, errors or unsatisfactory performance of our services,
our reputation, our ability to protect the confidentiality of plan
provider, plan sponsor and plan participant data and other privacy
concerns, acquisition activity involving plan providers or plan
sponsors, our ability to compete, our regulatory environment, and risks
associated with our fiduciary obligations. More information regarding
these and other risks, uncertainties and factors is contained in the
Company’s Form 10-Q for the quarter ended March 31, 2017, as filed with
the SEC, and in other reports filed by the Company with the SEC from
time to time, including the Company’s 10-K filed for the year ended
December 31, 2016. You are cautioned not to unduly rely on these
forward-looking statements, which speak only as of the date of this
press release. All information in this press release and its attachments
is as of the date stated or May 4, 2017 and unless required by law,
Financial Engines undertakes no obligation to publicly revise any
forward-looking statement to reflect circumstances or events after the
date of this press release or to report the occurrence of unanticipated
events.

i For independence methodology and ranking, see
InvestmentNews RIA Data Center. (http://data.investmentnews.com/ria/).ii
Please see “About Non-GAAP Financial Measures” for definitions of the
terms adjusted net income, adjusted earnings per share, and adjusted
EBITDA.iii Operating metrics include both advised and
subadvised relationships.iv Information regarding
enrollment rates and the component AUC can be found in the section
entitled “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” in the Company’s Securities and Exchange
Commission (“SEC”) filings, including the Form 10-K for the year ended
December 31, 2016.

Financial Tables

FINANCIAL ENGINES, INC. AND SUBSIDIARIES

Unaudited Consolidated Balance Sheets

December 31,

March 31,

2016

2017

(In thousands, except per share data)

Assets

Current assets:

Cash and cash equivalents

$

134,246

$

137,742

Accounts receivable, net

103,256

110,855

Prepaid expenses

7,370

8,311

Other current assets

3,468

4,570

Total current assets

248,340

261,478

Property and equipment, net

24,532

23,756

Intangible assets, net

205,751

203,798

Goodwill

312,020

312,020

Long-term deferred tax assets

40,504

60,230

Direct response advertising, net

5,849

5,200

Other assets

3,140

1,816

Total assets

$

840,136

$

868,298

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable

$

36,780

$

33,409

Accrued compensation

27,667

10,540

Deferred revenue

4,701

4,681

Dividend payable

4,350

4,396

Other current liabilities

4,343

3,376

Total current liabilities

77,841

56,402

Long-term deferred rent

12,269

11,756

Long-term tax liabilities

2,207

—

Other liabilities

488

561

Total liabilities

92,805

68,719

Contingencies

Stockholders’ equity:

Preferred stock, $0.0001 par value - 10,000 authorized as of
December 31, 2016 and March 31, 2017; None issued or outstanding
as of December 31, 2016 and March 31, 2017

—

—

Common stock, $0.0001 par value - 500,000 authorized as of
December 31, 2016 and March 31, 2017; 63,476 and 64,112 shares
issued and 62,199 and 62,835 shares outstanding as of December 31,
2016 and March 31, 2017, respectively

6

6

Additional paid-in capital

782,079

803,336

Treasury stock, at cost (1,277 shares and 1,277 shares as of
December 31, 2016 and March 31, 2017, respectively)

(47,637

)

(47,637

)

Retained Earnings

12,883

43,874

Total stockholders’ equity

747,331

799,579

Total liabilities and stockholders’ equity

$

840,136

$

868,298

FINANCIAL ENGINES, INC. AND SUBSIDIARIES

Unaudited Consolidated Statements of Income

Three Months Ended

March 31,

2016

2017

(In thousands, except per share data)

Revenue:

Professional management

$

82,806

$

106,760

Platform

7,098

6,894

Other

2,154

441

Total revenue

92,058

114,095

Costs and expenses:

Cost of revenue

39,331

51,525

Research and development

9,267

10,568

Sales and marketing

18,463

19,315

General and administrative

14,600

12,194

Amortization of intangible assets, including internal use software

3,026

4,163

Total costs and expenses

84,687

97,765

Income from operations

7,371

16,330

Interest income, net

4

67

Other expense, net

(33

)

(128

)

Income before income taxes

7,342

16,269

Income tax expense

4,013

4,095

Net and comprehensive income

$

3,329

$

12,174

Dividends declared per share of common stock

$

0.07

$

0.07

Net income per share attributable to holders of common stock

Basic

$

0.06

$

0.19

Diluted

$

0.06

$

0.19

Shares used to compute net income per share attributable to
holders of common stock

Basic

58,256

62,445

Diluted

59,187

64,503

FINANCIAL ENGINES, INC. AND SUBSIDIARIES

Unaudited Consolidated Statements of Cash Flows

Three Months Ended

March 31,

2016

2017

(In thousands)

Cash flows from operating activities:

Net income

$

3,329

$

12,174

Adjustments to reconcile net income to net cash provided by
operating activities:

Depreciation and amortization

2,047

2,118

Amortization of intangible assets

2,922

4,035

Stock-based compensation

6,204

8,443

Amortization of deferred sales commissions

418

288

Amortization and impairment of direct response advertising

1,214

919

Amortization of (discount) on short-term investments

(5

)

—

Provision for doubtful accounts

183

217

Deferred tax

3,173

5,301

Loss on fixed asset disposal

20

123

Loss on sale of short-term investments

18

—

Changes in operating assets and liabilities, net of acquired assets
and liabilities:

Accounts receivable

3,111

(7,815

)

Prepaid expenses

(172

)

(1,024

)

Direct response advertising

(352

)

(288

)

Other assets

(1,637

)

(1,226

)

Accounts payable

(10,019

)

(3,616

)

Accrued compensation

(10,035

)

(17,127

)

Deferred revenue

(397

)

(67

)

Deferred rent

349

163

Other liabilities

(393

)

12

Net cash (used in) provided by operating activities

(22

)

2,630

Cash flows from investing activities:

Purchase of property and equipment

(1,592

)

(998

)

Capitalization of internal use software

(1,738

)

(2,030

)

Sale of short-term investments

39,923

—

Cash paid for acquisitions, net of cash acquired

(240,953

)

—

Net cash used in investing activities

(204,360

)

(3,028

)

Cash flows from financing activities:

Payments on capital lease obligations

(26

)

(34

)

Payments related to business combinations

—

(1,723

)

Net share settlements for minimum tax withholdings

(516

)

(3,239

)

Proceeds from issuance of common stock

429

13,241

Cash dividend payments

(3,615

)

(4,351

)

Net cash (used in) provided by financing activities

(3,728

)

3,894

Net (decrease) increase in cash and cash equivalents

(208,110

)

3,496

Cash and cash equivalents, beginning of period

305,216

134,246

Cash and cash equivalents, end of period

$

97,106

$

137,742

Supplemental cash flows information:

Income taxes paid, net of refunds

$

1,571

$

131

Interest paid

$

4

$

13

Non-cash operating, investing and financing activities:

Issuance of common stock related to acquisition

$

267,018

$

—

Unpaid purchases of property and equipment

$

852

$

440

Purchase of property and equipment with noncash tenant improvement
allowance

The estimated items are provided solely for the purpose of
reconciling our 2017 outlook for GAAP net income to our 2017
outlook for non-GAAP adjusted EBITDA and are not intended and
should not be construed as part of the Company’s outlook for 2017,
which outlook is limited to revenue, net income and non-GAAP
adjusted EBITDA. These items are subject to a number of variables
which make them inherently difficult to estimate accurately. In
addition, actual amounts for such items have historically varied
and may continue to vary significantly from period to period. Any
variances in these estimates may in turn have a significant impact
on our 2017 outlook and future GAAP results.

***This is a partial listing of Financial Engines’ customers as of June 18, 2015. These companies have consented to disclosure of their relationships with Financial Engines. This does not constitute an endorsement or approval of the advisory service provided. Third-party marks appearing on this site are the property of their respective owners.

All information provided through the Education Center is for education purposes only and does not constitute investment, legal, or tax advice, an offer to buy or sell any security or insurance product or an endorsement of any third party or such third party's views. Whenever there are hyperlinks to third-party content, this information is intended to provide additional perspective and should not be construed as an endorsement of any services, products, guidance, individuals, or points of view outside Financial Engines. All examples are hypothetical and for illustrative purposes only. Please contact one of our investment advisors for more complete information based on your personal circumstances and to obtain personalized individual investment advice.

Videos presented on this website are for educational purposes only and do not constitute investment advice or an offer to buy or sell any security or insurance product.